Euro Legislation Could Hit Landlord Profits

Euro Legislation Could Hit Landlord Profits

Scottish landlords, already left reeling by Government legislation which is eating into their profits, could now face a new and terrifying threat.

There are moves afoot to look at introducing stringent rent controls similar to those which already exist in other European countries. These moves, if successful, will limit the amount landlords can increase the rent on their property.

These systems already operate in Denmark, France, Germany, Holland and Sweden. And the consequences have left property owners very unhappy.

A rough guide to these Euro schemes can be found below.

If, after reading about them, you feel that these possible changes could be too much to bear then don’t hesitate to contact us.

R&T Property Solutions would like to hear from any landlord who is thinking of selling up and cashing in on their investment.

We offer a simple, no-nonsense purchasing approach.

Our offices are in Glasgow but we are happy to look at properties anywhere in Scotland.

We are particularly interested in hearing from buy-to-let investors.

We know that many are considering their position and possibly looking to liquidate their assets due to a variety of negative legislative developments in the past year.

If you are in that situation then get in touch with us. We can purchase your property and pay cash for it, often concluding the deal within just seven days.

In recent months the Westminster Government has introduced measures which are not landlord-friendly, while at the same time Scotland has new private tenancy legislation.

The Private Housing (Tenancies) (Scotland) Act 2016 was passed by the Scottish Parliament in March this year and received Royal Assent the following month.

The Act’s initial provisions are now in force, but the real impact will only be felt by landlords when the rules are applied in full in the near future.

At the same time there are calls by Shelter for the introduction of laws which would prevent landlords increasing rents above the rate of inflation. Shelter would also like to see legislation which would provide five-year tenancies.

Currently in Scotland most leases typically last 6-12 months.

However, the European model is even more restrictive and has led to great controversy.

The Danes have two schemes in operation and both are said to hold rents below market value.

Just last year, the French introduced contentious measures which limit rental increases in Paris. The new rules are complex but they have resulted in an angry backlash from landlords and property agents alike.

According to an Observer interview with Kath Scanlon, a London School of Economics researcher, tenants have the right to live in German rented property until they die.

In that country around 50% of householders rent privately with standard leases lasting a lifetime.

Before limits were introduced in Germany, landlords were able to set the rent at the level they wanted. But not anymore.

The changes have left everyone dissatisfied, including tenants.

The Dutch have come up with perhaps the most complex arrangements for setting rental levels yet.

According to Kath Scanlon, the amount payable is based on several “quality points”. These include size, a garden and whether or not the property is double glazed. Curiously, location isn’t a factor.

In Sweden the rent on a property is set after negotiations between representatives of landlords and tenants. This not only complicates the issue but also, inevitably, adds to delays and costs for all sides.

In 2014 this system of intense negotiation led to a rent rise in the nation’s capital, Stockholm, of just 1.12%.

It hardly seems worth bother.

Except that there are people out there who want us to follow suit. Hopefully, they won’t get their way, because it serves the interests of no-one.

In Sweden, one shocking consequence of these rent negotiations was a decrease in the supply of accommodation. The shortage has created a busy black market for rental property, which can’t possibly be beneficial for would-be tenants.

We at R&T Property Solutions pride ourselves on operating ethically at all times.

For example, if your property has a tenant we would not be put off buying it. And if we go ahead with the purchase we guarantee the tenants’ rights will not be infringed.

We have a strict code of conduct with regard to tenants and we comply with the various rules and regulations which govern regulated tenancy agreements.

We are more than happy to accept these agreements and guarantee to treat your tenants fairly and ethically in line with our code of conduct.

• We will not disturb tenants.
• We do not require internal access.
• We do not require to conduct internal surveys.
• We will always act ethically and be reasonable to existing tenants, assuring them of minimal disruption.
• We exercise strict client confidentiality for vendors.

So, if you are now considering your options with regard to selling your property then don’t delay. Call us today.

We offer a sensible, professional and effective solution – and we promise to be very quick about it!